State Tax Commission of Missouri

OTIS & GWENDOLYN WILLIAMS, )

)

Complainants, )

)

v. ) Appeal No. 05-20154

)

ED BUSHMEYER, ASSESSOR, )

ST. LOUIS CITY, MISSOURI, )

)

Respondent. )

ORDER

AFFIRMING HEARING OFFICER DECISION

UPON APPLICATION FOR REVIEW

On June 21, 2006, Senior Hearing Officer W. B. Tichenor entered his Decision and Order (Decision) setting aside the assessments by the St. Louis City Board of Equalization.

Respondent filed his Application for Review of the Decision. Complainants filed their Response.

CONCLUSIONS OF LAW AND DECISION

A review of the record in the present appeal provides support for the determinations made by the Hearing Officer. There is competent and substantial evidence to establish a sufficient foundation for the Decision of the Hearing Officer. A reasonable mind could have conscientiously reached the same result based on a review of the entire record. The Commission finds no basis to support a determination that the Hearing Officer acted in an arbitrary or capricious manner or abused his discretion as the trier of fact and concluder of law in this appeal. Hermel, Inc. v. STC, 564 S.W.2d 888 (Mo. 1978); Black v. Lombardi, 970 S.W.2d 378 (Mo. App. E.D. 1998); Holt v. Clarke, 965 S.W.2d 241 (Mo. App. W.D. 1998); Smith v. Morton, 890 S.W.2d 403 (Mo. App. E.D. 1995). Phelps v. Metropolitan St. Louis Sewer Dist., 598 S.W.2d 163 (Mo. App. E.D. 1980).

The Hearing Officer did not err in his determinations as challenged by Respondent.

ORDER

The Commission upon review of the record and Decision in this appeal, finds no grounds upon which the Decision of the Hearing Officer should be reversed or modified. Accordingly, the Decision is affirmed.

Judicial review of this Order may be had in the manner provided in Sections 138.432 and 536.100 to 536.140, RSMo within thirty days of the date of the mailing of this Order.

If judicial review of this decision is made, any protested taxes presently in an escrow account in accordance with this appeal shall be held pending the final decision of the courts. If no judicial review is made within thirty (30) days, this decision and order is deemed final and the Collector of St. Louis City, as well as the collectors of all affected political subdivisions therein, shall disburse the protested taxes presently in an escrow account in accord with the decision on the underlying assessment in this appeal. If any or all protested taxes have been disbursed pursuant to Section 139.031(8), RSMo, either party may apply to the circuit court having jurisdiction of the cause for disposition of the protested taxes held by the taxing authority.

SO ORDERED September 26, 2006.

STATE TAX COMMISSION OF MISSOURI

Bruce E. Davis, Chairman

Jennifer Tidwell, Commissioner

Charles Nordwald, Commissioner

DECISION AND ORDER

HOLDING

Decision of the St. Louis City Board of Equalization reducing the assessment made by the Assessor, AFFIRMED IN PART and MODIFIED IN PART, true value in money for the subject property for tax years 2005 and 2006 is set at $550,000, assessed value is set at $90,370.

Complainants appeared pro se.

Respondent appeared by Counsel, Carl W. Yates, III, Associate City Counselor.

Case heard and decided by Senior Hearing Officer W. B. Tichenor.

ISSUE

The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2005, and to address the issues of inequitable distribution of tax burden and arbitrary, non-duplicable assessment, as raised by Complainants.

SUMMARY

Complainants appeal, on the ground of overvaluation, inequitable distribution of tax burden and arbitrary, non-duplicable assessment, the decision of the St. Louis City Board of Equalization, which reduced the valuation of the subject property. The Assessor determined an appraised value of $600,210, assessed value of $114,040, as residential property. The Board reduced the value to $550,000, assessed value of $104,500. Complainant proposed no value on their Complaint for Review of assessment. A hearing was conducted on April 25, 2006, at the Assessor’s Conference Room, City Hall, St. Louis, Missouri.

The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.

Complainants’ Evidence

Complainants offered into evidence the following documents as exhibits.

Exhibit A – Valuation data consisting of (1) a summary statement on the appeal of Complainant’s property; (2) a spreadsheet listing sales data on 24 properties in Compton Heights that had sold from 2003 through 2004; (3) a spreadsheet listing sales data on 69 properties in Lafayette Square that had sold from 2003 through 2004; (4) a spreadsheet listing sales data on 109 properties in the Central West End that had sold from 2003 through 2004; (5) four photographs of properties referred to in the testimony of Complainants.

Exhibit B – Data sheets from the Assessor’s website for nine properties referred to in Complainants’ testimony.

Exhibit C – Copy of article in the June 1, 2005, edition of the South St. Louis Journal.

Exhibit C was excluded upon objection by Respondent’s Counsel and is not considered as evidence in rendering a decision in this appeal. Exhibit C is hearsay and has no relevant information as to the fair market value of the subject property. Exhibits A and B were received into evidence.

Each Complainant testified as to matters they deemed important to their case explaining the basis for offering Exhibits A and B.

Respondent’s Evidence

Respondent placed into evidence the testimony of Mr. John Norton, appraiser for St. Louis City. The appraiser testified as to his appraisal of the subject property. The Appraisal Report, Exhibit 1, of Mr. Norton was received into evidence. Mr. Norton arrived at an opinion of value for the subject property of $550,000 based upon a sales comparison approach to value. In performing his sales comparison analysis, the appraiser relied upon the sales of three properties which he deemed to be comparable to the subject property.

FINDINGS OF FACT

1. Jurisdiction over this appeal is proper. Complainants timely appealed to the State Tax Commission from the decision of the St. Louis City Board of Equalization.

2. The subject property is located at 2115 Park Avenue, St. Louis, Missouri. The property is identified by locator number 2279-04-0128-0. The property consists of a lot with 76 front feet, improved by a three-story brick single-family residence. The home was built in 1885 and has a total of 8,664 square feet of living area based on the Assessor’s records. The property is located in the Lafayette Square neighborhood of the City of St. Louis.

3. There was no evidence of new construction and improvement from January 1, 2005, to January 1, 2006.

4. Complainants’ evidence was not substantial and persuasive to rebut the presumption of correct valuation by the Board and establish the true value in money as of January 1, 2005, to be less than $550,000. Complainant’s testified in direct examination that the fair market value of the subject property would be in a range from $500,000 to $550,000.

5. Complainants’ evidence, testimony and arguments relating to inequitable distribution of tax burden and arbitrary, non-duplicable assessment falls under the general category of inequity in assessment due to the failure of the Assessor to assess recently sold properties based upon actual sales price.

6. Official notice is taken that the median residential assessment ratio established by the Ratio Section of the State Tax Commission for St. Louis City for the 2005 assessment year is 16.43. The assessed value, based upon the ratio of 16.43 is $90,370 ($550,000 x .1643 = $90,365, rounded to $90,370).

DECISION

Jurisdiction

The Commission has jurisdiction to hear this appeal and correct any assessment which is shown to be unlawful, unfair, arbitrary or capricious. Article X, section 14, Mo. Const. of 1945; Sections 138.430, 138.431, RSMo. The hearing officer shall issue a decision and order affirming, modifying or reversing the determination of the board of equalization, and correcting any assessment which is unlawful, unfair, improper, arbitrary, or capricious. Section 138.431.4, RSMo.

Official and Judicial Notice

Agencies shall take official notice of all matters of which the courts take judicial notice. Section 536.070(6), RSMo.

Courts will take judicial notice of their own records in the same cases. State ex rel. Horton v. Bourke, 129 S.W.2d 866, 869 (1939); Barth v. Kansas City Elevated Railway Company, 44 S.W. 788, 781 (1898). In addition, courts may take judicial notice of records in earlier cases when justice requires - Burton v. Moulder, 245 S.W.2d 844, 846 (Mo. 1952); Knorp v. Thompson, 175 S.W.2d 889, 894 (1943); Bushman v. Barlow, 15 S.W.2d 329, 332 (Mo. banc 1929) - or when it is necessary for a full understanding of the instant appeal. State ex rel St. Louis Public Service Company v. Public Service Commission, 291 S.W.2d 95, 97 (Mo. banc 1956). Courts may take judicial notice of their own records in prior proceedings involving the same parties and basically the same facts. In re Murphy, 732 S.W.2d 895, 902 (Mo. banc 1987); State v. Gilmore, 681 S.W.2d 934, 940 (Mo. banc 1984); State v. Keeble, 399 S.W.2d 118, 122 (Mo. 1966).

Board of Equalization Presumption & Rebutting of the Presumption

In addressing Complainants’ appeal, the Hearing Officer does so under a presumption as to the true value in money determined by the Board of Equalization. There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization. Hermel, Inc. v. STC, 564 S.W.2d 888, 895 (Mo. banc 1978); Chicago, Burlington & Quincy Railroad Co. v. STC, 436 S.W.2d 650, 656 (Mo. 1968); May Department Stores Co. v. STC, 308 S.W.2d 748, 759 (Mo. 1958).

The presumption of correct assessment is rebutted when the taxpayer presents substantial and persuasive evidence to establish that the Board’s assessment is erroneous. Snider, Hermel & Cupples Hesse, supra.

Standard for Valuation

Section 137.115, RSMo requires that property be assessed based upon its true value in money which is defined as the price a property would bring when offered for sale by one willing or desirous to sell and bought by one who is willing or desirous to purchase but who is not compelled to do so. St. Joe Minerals Corp. v. State Tax Commission, 854 S.W.2d 526, 529 (Mo. App. E.D. 1993); Missouri Baptist Children’s Home v. State Tax Commission, 867 S.W.2d 510, 512 (Mo. banc 1993). It is the fair market value of the subject property on the valuation date. Hermel, supra.

Market value is the most probable price in terms of money which a property should bring in competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeable and assuming the price is not affected by undue stimulus.

Implicit in this definition is the consummation of a sale as of a specific date and the passing of title from seller to buyer under conditions whereby:

1. Buyer and seller are typically motivated.

2. Both parties are well informed and well advised, and each acting in what they consider their own best interests.

3. A reasonable time is allowed for exposure in the open market.

4. Payment is made in cash or its equivalent.

5. Financing, if any, is on terms generally available in the Community at the specified date and typical for the property type in its locale.

6. The price represents a normal consideration for the property sold unaffected by special financing amounts and/or terms, services, fees, costs, or credits incurred in the transaction.

Real Estate Appraisal Terminology, Society of Real Estate Appraisers, Revised Edition, 1984; See also, Real Estate Valuation in Litigation, J. D. Eaton, M.A.I., American Institute of Real Estate Appraisers, 1982, pp. 4-5; Property Appraisal and Assessment Administration, International Association of Assessing Officers, 1990, pp. 79-80; Uniform Standards of Professional Appraisal Practice, Glossary.

In order to prevail, Complainants must present an opinion of market value and substantial and persuasive evidence that the proposed value is indicative of the market value of the subject property on January 1, 2005. Hermel, Inc. v. State Tax Commission, 564 S.W.2d 888, at 897. Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. See, Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959). Persuasive evidence is that evidence which has sufficient weight and probative value to convince the trier of fact. The persuasiveness of evidence does not depend on the quantity or amount thereof but on its effect in inducing belief. Brooks v. General Motors Assembly Division, 527 S.W.2d 50, 53 (Mo. App. 1975). See also, Westwood Partnership v. Gogarty, 103 S.W.3d 152 (Mo. App. E.D. 2003); Daly v. P. D. George Co., 77 S.W.3d 645 (Mo. App. E.D. 2002); Reeves v. Snider, 115 S.W.3d 375 (Mo. App. S.D. 2003).

Complainants did not actually challenge the true value in money or fair market value which had been placed on their property. The evidence presented addressed the assessment of property at a ratio that can be calculated to be less than the statutory ratio of nineteen percent of fair market value. The Hearing Officer, upon review of the sales data presented by Mr. and Mrs. Williams and his own calculation of the median and mean assessment ratios for the more than 200 sales put forth on the record, determined the appropriate course of action was to take official notice of the median residential assessment ratio established by the Ratio Section of the State Tax Commission. That ratio for St. Louis City for 2005 has been established at 16.43. The Complainants’ evidence while not meeting the strict standards for a classic discrimination case was sufficient to raise the question of the equality of assessment as applied to their property. Accordingly, the Hearing Officer is persuaded that in order to correct an “unfair” assessment the appropriate decision in this case is to apply the median residential ratio to the true value in money for the subject property to arrive at the assessed value for 2005 and 2006.

ORDER

The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization for St. Louis City for the subject tax day is AFFIRMED as to true value in money and MODIFIED as to assessed value.

The assessed value for the subject property for tax years 2005 and 2006 is set at $90,370.

A party may file with the Commission an application for review of this decision within thirty (30) days of the mailing of such decision. The application shall contain specific grounds upon which it is claimed the decision is erroneous. Failure to state specific facts or law upon which the appeal is based will result in summary denial. Section 138.432, RSMo 2000.

If an application for review of this decision is made to the Commission, any protested taxes presently in an escrow account in accordance with this appeal shall be held pending the final decision of the Commission. If no application for review is received by the Commission within thirty (30) days, this decision and order is deemed final and the Collector of St. Louis City, as well as the collectors of all affected political subdivisions therein, shall disburse the protested taxes presently in an escrow account in accord with the decision on the underlying assessment in this appeal. If any or all protested taxes have been disbursed pursuant to Section 139.031(8), RSMo, either party may apply to the circuit court having jurisdiction of the cause for disposition of the protested taxes held by the taxing authority.